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October 23, 2013

Royal Oak Schools seeks millage renewal

Operating millage accounts for one-third of district’s budget

By Robert Guttersohn
C & G Staff Writer

ROYAL OAK — More than one-third of the Royal Oak Schools’ budget will be on the line during the Nov. 5 election.

The district is seeking voter approval to renew its operating millage for the next seven years, which provides $18.8 million of the district’s $55 million operating budget.

If the renewal is approved, the school district in the summer of 2014 will continue to levy 18 mills on nonhomestead — business and nonprimary residential — properties. That millage is required by law in order to receive state funding. Additionally, the school district would levy up to 3.4 mills from residential properties — a decrease from what the school district was authorized to levy from 2006-2013.

District officials say it is likely it would not need to levy the full 3.4 mills throughout the next seven years.

“What (voters) actually approve is an authorization of a maximum tax rate,” said Superintendent Shawn Lewis-Lakin. “The actual levy is set each spring.”

For example, in 2005, voters authorized the district to levy up to 3.5 mills from homeowners from the summer of 2006 until last summer. Yet for the last five years, the district has levied on average about 3 mills from homeowners, said Rick West, the district’s executive director of business services and finance.

The state limits the amount the district can levy on its residents based on a formula factoring in both student population and property values.

“We can only levy up to $850 per student,” West said. “But we want to give ourselves flexibility that if property tax values go up and student counts go way down, we can still generate $850 (per student).”

The history of the operating millage dates back to the passage of Proposal A in 1994. The voter-approved amendment to the state’s constitution raised the sales tax and began providing statewide per-pupil funding. It also limited — and in many cases eliminated — school districts’ ability to turn to local property owners for taxes to pay for operational expenses.

Before Proposal A, Royal Oak levied 38.9 mills from its property owners, according to district records.

In 1995, voters first approved an operating millage, authorizing the district to levy up to 7.51 mills. Two elections later, that authorized amount was reduced to 3.5 mills.

“We’ve been able to lower the cap in this most recent authorization to 3.4 (mills),” Lewis-Lakin said.

Each spring, the state re-evaluates how much the district can levy. In the summer of 2013, the district levied 2.98 mills, West said.

That meant that a house valued at $200,000 paid about $298 in property taxes to the school district.

Because the amount they’ve needed to levy hasn’t come close to 3.5 mills in at least the last five years, district officials felt comfortable lowering the cap to 3.4 mills.

“We levy based on needs, not wants,” Lewis-Lakin said. “But we still want to allow for the unknowns.”

If the operating millage renewal failed to pass, the district would have to make drastic cuts to the programs it offers, Lewis-Lakin said.

“Over the last five years, funding cuts from the state have resulted in a loss of revenue to the district of over $3 million,” Lewis-Lakin said. If the renewal failed, “this would be a loss six times that.”

Lewis-Lakin has confidence that voters will support the non-homestead and homestead renewals.

“Generally, people who we have interacted with in the community are supportive,” he said. “My biggest concern is voters coming to the polls.

“I want to make sure the people who are committed to the community, who care about the schools and recognize how critical the schools are to the well-being of the overall community, that they remember to vote on Nov. 5”

You can reach C & G Staff Writer Robert Guttersohn at rguttersohn@candgnews.com or at (586)218-5006.